Zug Estates Holding AG / Key word(s): Annual Results/Real Estate
Ad hoc press release pursuant to article 53 Listing Rules
The property portfolio of the Zug Estates Group performed quite well in the 2021 financial year. Property income rose yet again and the vacancy rate was reduced from 5.0% to 4.0%. In the hotel & catering segment, the environment remained challenging in 2021 due to the consequences of the COVID-19 pandemic. Nevertheless, sales generated through catering and hotel operations were up slightly over the previous year.
This resulted in net income of CHF 75.6 million in the 2021 financial year, which is CHF 43.3 million or 134.2% above the prior-year figure of CHF 32.3 million. This substantial year-on-year increase is attributable in particular to positive revaluation effects as well as the successful sale of the Hofstrasse 1a/b property in Zug. Net income excluding revaluation and special effects was also boosted considerably, up CHF 5.9 million or 23.0% to CHF 31.8 million (previous year: CHF 25.9 million).
Net income increased due to higher property income
In a persistently challenging environment still shaped by the COVID-19 pandemic, hotel & catering income rose at a low level by CHF 1.4 million or 20.1%, from CHF 7.0 million to CHF 8.4 million. The easing of travel restrictions in the second half of 2021 helped in this respect. Sales were down again towards the end of the year as the omicron variant spread. Persistently robust demand for our Serviced City Apartments and strict cost management resulted in a gross operating profit (GOP) of 25.8% (previous year: 9.1%). The economic losses were also mitigated somewhat through the one-time payment of a COVID-19 non-repayable contribution in the amount of CHF 2.1 million. The corresponding effects are reported under other operating revenue.
The sale of the last condominiums in the Aglaya project in Rotkreuz still generated revenue of CHF 72.5 million in the previous year. As expected, the cessation of this revenue reduced operating revenue by CHF 66.2 million or 47.1%, from CHF 140.4 million to CHF 74.2 million.
A reduction in renovation work performed at the Metalli complex in Zug also resulted in lower property expenses, which were down by CHF 1.4 million or 15.3%, from CHF 9.0 million to CHF 7.6 million, as expected.
The effects mentioned above reduced operating income before depreciation and revaluation from CHF 49.6 million to CHF 46.9 million, a CHF 2.7 million or 5.4% decline.
2021 brought a revaluation gain of CHF 42.4 million compared to a revaluation loss of CHF 2.2 million in the previous year. The sale of the final property outside our two sites also generated a gain on sale before tax of CHF 7.3 million. No investment properties were sold in the previous year.
EBIT rose considerably by CHF 49.5 million or 112.9%, from CHF 43.7 million to CHF 93.2 million, as a result.
With average interest rates on interest-bearing financial liabilities remaining unchanged, financing costs were capitalised at a lower rate, which caused financing costs to increase by CHF 0.3 million or 3.9%, from CHF 7.2 million to CHF 7.5 million.
Portfolio value increases to CHF 1.7 billion
Vacancy rate reduced to 4.0%
Residential products have hardly reported any vacancies for years and even the retail and catering spaces enjoy very brisk demand. New leases for retail space were concluded with the brands Orell Füssli, McOptic and Otto's Beauty at the Metalli mall, for example, as well as one lease for a catering operation at the Suurstoffi site. What's more, the Secret Garden pop-up restaurant has invigorated the restaurant portion of the City Garden Hotel since May 2021, while the Metalli complex saw the Miss Miu themed restaurant open its doors in August 2021.
Leases for space totalling more than 12'500m2 and rental income of more than CHF 4.8 million p. a. were renewed or extended during the year under review.
The longest lease extensions are those for the office spaces at the Suurstoffi site used by Novartis Pharma Schweiz AG, which signed a lease extension for a smaller 4'800m2 office space with a term that extends until at least 31 December 2027, as well as the office spaces at the Metalli complex used by Hoerbiger Holding AG. Additionally, new leases were concluded for around 1'000m2 of office space at the Suurstoffi site and 1'500m2 at the City Center site.
Sustainability reporting expanded and nearly CO2-free operation
With its completion of the new buildings at the Suurstoffi site as well as the connection of the Metalli complex to the Circulago lake water district, Zug Estates has been able to slash its greenhouse gas emissions by 90%, from 17.3 to 1.8 kg per square metre of energy reference area, between 2010 and 31 March 2021. That positions Zug Estates as a leader in Switzerland. Another nine properties were connected to the Circulago lake water district in the year under review, which will reduce its CO2 emissions even further. Connecting the remaining properties by 2023 will enable Zug Estates to operate its entire portfolio with nearly no CO2 emissions.
Metalli Living Space development project
With a view to the upcoming architectural competition and while development plans are being drawn up by the City of Zug, Zug Estates is revisiting the positioning and design of the building's various use segments and parts. When developing the Metalli Living Space, Zug Estates intends to preserve those elements that work while also creating ample space for something new.
Very solid equity ratio
Interest-bearing debt declined by CHF 30.7 million or 5.2% during the period under review, from CHF 591.8 million to CHF 561.1 million. Interest-bearing debt as a percentage of total assets therefore amounted to 33.8% compared to 36.4% in the previous year. The average maturity of this debt amounted to 3.6 years (previous year: 4.3 years), whereby the average interest rate for the period for interest-bearing debt has remained unchanged at 1.3%.
A conventional bond in the amount of CHF 100.0 million that was due to expire was replaced by another green bond on 17 February 2022. That makes Zug Estates the first listed real estate company in Switzerland to have a bond portfolio comprised exclusively of green financing products. The new bond has a term of just over seven years and a coupon of 0.75%.
Ordinary dividend raised
Outlook for 2022
Developments in the hotel & catering segment hinge largely on how the COVID-19 pandemic plays out. Compared to the previous year, we anticipate better capacity utilisation and an increase in total income. The results in the hotel & catering segment will be lower, though, due to the elimination of the COVID-19 non-repayable contribution under other operating revenue.
All in all, we expect net income excluding revaluation and special effects to slightly exceed CHF 30 million for the 2022 financial year.
Report dated 4 March 2022
A virtual financial results press conference will be held at 10 a.m. today in German. Patrik Stillhart (CEO) and Mirko Käppeli (CFO) will present the 2021 annual results, after which they will be available to answer questions.
Please use the link that follows to sign up for the conference. We look forward to greeting you. https://www.zugestates.ch/en/stories/registration-annual-media-conference
For further information, please contact:
About Zug Estates
Zug Estates Holding AG | Industriestrasse 12 | CH-6300 Zug | T +41 41 729 10 10 | www.zugestates.ch
End of ad hoc announcement
|Company:||Zug Estates Holding AG|
|Phone:||+41 41 729 10 10|
|Listed:||SIX Swiss Exchange|
|EQS News ID:||1294329|
|End of Announcement||EQS News Service|
1294329 04-March-2022 CET/CEST
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